Health effects of smoking
In their next general challenge to fraud liability, Defendantsargue that their false and misleading statements about the health effects of smoking cannot, as a legal matter, be fraudulentbecause their statements were not material. This argument isbased on a flawed understanding of the materiality requirement.In order for a false or misleading statement to qualify asmail or wire fraud, it “must concern a material or important factor matter.”
This materiality requirement is met if the matter atissue is “of importance to a reasonable person in making adecision about a particular matter or transaction.” Id.Materiality does not require proof that any specific person (ornumber of people) purchased cigarettes as a result of the falsestatements. Nor does it require Defendants’ false statements tobe the cause, reason, or sufficient condition of any person’sdecision to purchase cigarettes. Moreover, no subjectiveevidence regarding any particular person is required; the test isonly whether a reasonable person would consider the matter tobe of importance regarding the transaction.
This materiality requirement is met if the matter atissue is “of importance to a reasonable person in making adecision about a particular matter or transaction.” Id.Materiality does not require proof that any specific person (ornumber of people) purchased cigarettes as a result of the falsestatements. Nor does it require Defendants’ false statements tobe the cause, reason, or sufficient condition of any person’sdecision to purchase cigarettes. Moreover, no subjectiveevidence regarding any particular person is required; the test isonly whether a reasonable person would consider the matter tobe of importance regarding the transaction.
